Dollar Holds Strong, Fed and Iran Risks Maintain Haven Demand
The US dollar held strong globally on Thursday, trading near a four-month high. The dollar index (DXY) hovered in the 100.11–100.16 range, reflecting the market's continued use of the USD as a haven amidst the escalating Iran war and energy volatility.
The main support came from two channels. First, rising geopolitical risks and disruptions to energy infrastructure prompted a risk-off trend, reinforcing demand for dollar liquidity. Second, the Fed's policy direction was seen as not providing room for rapid easing, leading the market to postpone expectations of interest rate cuts and keep yields relatively high.
Reuters also noted that the DXY had strengthened by around 2.5% since the war broke out in late February, confirming the continued dominance of haven flows into dollar assets.
Market Impact
FX: Energy importing currencies tend to be more vulnerable when oil prices are high and the USD is strong; the yen is also sensitive as market focus shifts to the Bank of Japan after the Fed. (CP)
Source: Newsmaker.id
